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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2190 Introduced in Senate (IS)]

104th CONGRESS
  2d Session
                                S. 2190

To amend the Internal Revenue Code of 1986 and the Social Security Act 
   to require the Internal Revenue Service to collect child support 
 through wage withholding and to eliminate State enforcement of child 
      support obligations other than medical support obligations.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 3, 1996

   Mr. Kerry introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend the Internal Revenue Code of 1986 and the Social Security Act 
   to require the Internal Revenue Service to collect child support 
 through wage withholding and to eliminate State enforcement of child 
      support obligations other than medical support obligations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Uniform Child Support Enforcement 
Act of 1996''.

SEC. 2. EFFECTIVE DATE; AMENDMENTS.

    (a) In General.--This Act and the amendments made by this Act shall 
take effect on the 1st day of the 1st calendar month that begins after 
the 3-year period that begins with the date of the enactment of this 
Act, if the Secretary of Health and Human Services certifies to the 
Congress that on such 1st day more than 50 percent of the States have 
not achieved a 75 percent collection rate in child support cases in 
which child support is awarded and due under the jurisdiction of such 
States pursuant to part D of title IV of the Social Security Act.
    (b) Elimination of Provisions of Law Relating To State Enforcement 
of Child Support Obligations Other Than Medical Support Obligations.--
Not later than 90 days after the effective date of this Act and the 
amendments made by this Act, the Secretary of Health and Human Services 
shall submit to the appropriate committees of the Congress a 
legislative proposal proposing such technical and conforming amendments 
as are necessary to eliminate State enforcement of child support 
obligations other than medical support obligations and to bring the law 
into conformity with the policy embodied in this Act.

SEC. 3. NATIONAL CHILD SUPPORT ORDER REGISTRY.

    (a) Establishment.--
            (1) In general.--The Secretary of the Treasury shall 
        establish in the Internal Revenue Service a national registry 
        of abstracts of child support orders.
            (2) Child support order defined.--As used in this section, 
        the term ``child support order'' means an order, issued or 
        modified by a State court or an administrative process 
        established under State law, that requires an individual to 
        make payments for support and maintenance of a child or of a 
        child and the parent with whom the child is living.
    (b) Contents of Abstracts.--The abstract of a child support order 
shall contain the following information:
            (1) The names, addresses, and social security account 
        numbers of each individual with rights or obligations under the 
        order, to the extent that the authority that issued the order 
        has not prohibited the release of such information.
            (2) The name and date of birth of any child with respect to 
        whom payments are to be made under the order.
            (3) The dollar amount of child support required to be paid 
        on a monthly basis under the order.
            (4) The date the order was issued or most recently 
        modified, and each date the order is required or scheduled to 
        be reviewed by a court or an administrative process established 
        under State law.
            (5) Any orders superseded by the order.
            (6) Such other information as the Secretary of the 
        Treasury, in consultation with the Secretary of Health and 
        Human Services, shall, by regulation require.

SEC. 4. CERTAIN STATUTORILY PRESCRIBED PROCEDURES REQUIRED AS A 
              CONDITION OF RECEIVING FEDERAL CHILD SUPPORT FUNDS.

    Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as 
amended by section 382 of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, is amended by inserting after 
paragraph (19) the following:
            ``(20)(A) Procedures which require any State court or 
        administrative agency that issues or modifies (or has issued or 
        modified) a child support order to transmit an abstract of the 
        order to the Internal Revenue Service on the later of--
                    ``(i) the date the order is issued or modified; or
                    ``(ii) the effective date of this paragraph.
            ``(B) Procedures which--
                    ``(i) require any individual with the right to 
                collect child support pursuant to an order issued or 
                modified in the State (whether before or after the 
                effective date of this paragraph) to be presumed to 
                have assigned to the Internal Revenue Service the right 
                to collect such support, unless the individual 
                affirmatively elects to retain such right at any time; 
                and
                    ``(ii) allow any individual who has made the 
                election referred to in clause (i) to rescind or revive 
                such election at any time.''.

SEC. 5. COLLECTION OF CHILD SUPPORT BY INTERNAL REVENUE SERVICE.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 
(relating to miscellaneous provisions), as amended by section 1204(a) 
of the Taxpayer Bill of Rights 2, is amended by adding at the end the 
following new section:

``SEC. 7525. COLLECTION OF CHILD SUPPORT.

    ``(a) Employee To Notify Employer of Child Support Obligation.--
            ``(1) In general.--Each employee shall specify, on each 
        withholding certificate furnished to such employee's employer--
                    ``(A) the monthly amount (if any) of each child 
                support obligation of such employee, and
                    ``(B) the TIN of the individual to whom each such 
                obligation is owed.
            ``(2) When certificate filed.--In addition to the other 
        required times for filing a withholding certificate, a new 
        withholding certificate shall be filed within 30 days after the 
        date of any change in the information specified under paragraph 
        (1).
            ``(3) Period certificate in effect.--Any specification 
        under paragraph (1) shall continue in effect until another 
        withholding certificate takes effect which specifies a change 
        in the information specified under paragraph (1).
            ``(4) Authority to specify smaller child support amount.--
        In the case of an employee who is employed by more than 1 
        employer for any period, such employee may specify less than 
        the monthly amount described in paragraph (1)(A) to each such 
        employer so long as the total of the amounts specified to all 
        such employers is not less than such monthly amount.
    ``(b) Certain Obligations Exempt.--This section shall not apply to 
a child support obligation for any month if the individual to whom such 
obligation is owed has so notified the Secretary and the individual 
owing such obligation more than 30 business days before the beginning 
of such month.
    ``(c) Employer Obligations.--
            ``(1) Requirement to deduct and withhold.--
                    ``(A) In general.--Every employer who receives a 
                certificate under subsection (a) that specifies that 
                the employee has a child support obligation for any 
                month shall deduct and withhold from the wages (as 
                defined in section 3401(a)) paid by such employer to 
                such employee during each month that such certificate 
                is in effect an additional amount equal to the amount 
                of such obligation or such other amount as may be 
                specified by the Secretary under subsection (d).
                    ``(B) Limitation on aggregate withholding.--In no 
                event shall an employer deduct and withhold under this 
                section from a payment of wages an amount in excess of 
                the amount of such payment which would be permitted to 
                be garnished under section 303(b) of the Consumer 
                Credit Protection Act.
            ``(2) Notice to secretary.--
                    ``(A) In general.--Every employer who receives a 
                withholding certificate shall, within 30 business days 
                after such receipt, submit a copy of such certificate 
                to the Secretary.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any withholding certificate if--
                            ``(i) a previous withholding certificate is 
                        in effect with the employer, and
                            ``(ii) the information shown on the new 
                        certificate with respect to child support is 
                        the same as the information with respect to 
                        child support shown on the certificate in 
                        effect.
            ``(3) When withholding obligation takes effect.--Any 
        withholding obligation with respect to a child support 
        obligation of an employee shall commence with the first payment 
        of wages after the certificate is furnished.
    ``(d) Secretary To Verify Amount of Child Support Obligation.--
            ``(1) Verification of information specified on withholding 
        certificates.--Within 45 business days after receiving a 
        withholding certificate of any employee, or a notice from any 
        person claiming that an employee is delinquent in making any 
        payment pursuant to a child support obligation, the Secretary 
        shall determine whether the information available to the 
        Secretary under section 3 of the Uniform Child Support 
        Enforcement Act of 1996 indicates that such employee has a 
        child support obligation.
            ``(2) Employer notified if increased withholding is 
        required.--If the Secretary determines that an employee's child 
        support obligation is greater than the amount (if any) shown on 
        the withholding certificate in effect with respect to such 
        employee, the Secretary shall, within 45 business days after 
        such determination, notify the employer to whom such 
        certificate was furnished of the correct amount of such 
        obligation, and such amount shall apply in lieu of the amount 
        (if any) specified by the employee with respect to payments of 
        wages by the employer after the date the employer receives such 
        notice.
            ``(3) Determination of correct amount.--In making the 
        determination under paragraph (2), the Secretary shall take 
        into account whether the employee is an employee of more than 1 
        employer and shall appropriately adjust the amount of the 
        required withholding from each such employer.
    ``(e) Child Support Obligations Required To Be Paid With Income Tax 
Return.--
            ``(1) In general.--The child support obligation of any 
        individual for months ending with or within any taxable year 
        shall be paid--
                    ``(A) not later than the last date (determined 
                without regard to extensions) prescribed for filing his 
                return of tax imposed by chapter 1 for such taxable 
                year, and
                    ``(B)(i) if such return is filed not later than 
                such date, with such return, or
                    ``(ii) in any case not described in clause (i), in 
                such manner as the Secretary may by regulations 
                prescribe.
            ``(2) Credit for amount previously paid.--The amount 
        required to be paid by an individual under paragraph (1) shall 
        be reduced by the sum of--
                    ``(A) the amount collected under this section with 
                respect to periods during the taxable year, plus
                    ``(B) the amount (if any) paid by such individual 
                under section 6654 by reason of subsection (f)(3) 
                thereof for such taxable year.
    ``(f) Failure To Pay Amount Owing.--If an individual fails to pay 
the full amount required to be paid under subsection (e) on or before 
due date for such payment, the Secretary shall assess and collect the 
unpaid amount in the same manner, with the same powers, and subject to 
the same limitations applicable to a tax imposed by subtitle C the 
collection of which would be jeopardized by delay.
    ``(g) Credit or Refund for Withheld Child Support in Excess of 
Actual Obligation.--There shall be allowed as a credit against the 
taxes imposed by subtitle A for the taxable year an amount equal to the 
excess (if any) of--
            ``(1) the aggregate of the amounts described in 
        subparagraphs (A) and (B) of subsection (e)(2), over
            ``(2) the actual child support obligation of the taxpayer 
        for such taxable year.
The credit allowed by this subsection shall be treated for purposes of 
this title as allowed by subpart C of part IV of subchapter A of 
chapter 1.
    ``(h) Child Support Treated as Taxes.--
            ``(1) In general.--For purposes of penalties and interest 
        related to failure to deduct and withhold taxes, amounts 
        required to be deducted and withheld under this section shall 
        be treated as taxes imposed by chapter 24.
            ``(2) Other rules.--Rules similar to the rules of sections 
        3403, 3404, 3501, 3502, 3504, and 3505 shall apply with respect 
        to child support obligations required to be deducted and 
        withheld.
            ``(3) Special rule for collections.--For purposes of 
        collecting any unpaid amount which is required to be paid under 
        this section--
                    ``(A) paragraphs (4), (6), and (8) of section 
                6334(a) (relating to property exempt from levy) shall 
                not apply, and
                    ``(B) there shall be exempt from levy so much of 
                the salary, wages, or other income of an individual as 
                is being withheld therefrom in garnishment pursuant to 
                a judgment entered by a court of competent jurisdiction 
                for the support of his minor children.
    ``(i) Collections Dispersed to Individual Owed Obligation.--
            ``(1) In general.--Payments received by the Secretary 
        pursuant to this section or by reason of section 6654(f)(3) 
        which are attributable to a child support obligation payable 
        for any month shall be paid (to the extent such payments do not 
        exceed the amount of such obligation for such month) to the 
        individual to whom such obligation is owed as quickly as 
        possible. Any penalties and interest collected with respect to 
        such payments also shall be paid to such individual.
            ``(2) Shortfalls in payments made by other withheld 
        amounts.--If the amount payable under a child support 
        obligation for any month exceeds the payments (referred in 
        paragraph (1)) received with respect to such obligation for 
        such month, such excess shall be paid from other amounts 
        received under subtitle C or section 6654 with respect to the 
        individual owing such obligation. The treasury of the United 
        States shall be reimbursed for such other amounts from 
        collections from the individual owing such obligation.
            ``(3) Families receiving state assistance.--In the case of 
        an individual with respect to whom an assignment of child 
        support payments to a State is in effect--
                    ``(A) of the amounts collected which represent 
                monthly support payments, the first $50 of any payments 
for a month shall be paid to such individual and shall not be 
considered as income for purposes of calculating amounts of State 
assistance, and
                    ``(B) all other amounts shall be paid to such State 
                pursuant to such assignment.
    ``(j) Treatment of Arrearages Under Child Support Obligations Not 
Subject To Section For Prior Period.--If--
            ``(1) this section did not apply to any child support 
        obligation by reason of subsection (b) for any prior period, 
        and
            ``(2) there is a legally enforceable past-due amount under 
        such obligation for such period,
then such past-due amount shall be treated for purposes of this section 
as owed (until paid) for each month that this section applies to such 
obligation.
    ``(k) Definitions and Special Rules.--
            ``(1) Definitions.--For purposes of this section--
                    ``(A) Withholding certificate.--The term 
                `withholding certificate' means the withholding 
                exemption certificate used for purposes of chapter 24.
                    ``(B) Business day.--The term `business day' means 
                any day other than a Saturday, Sunday, or legal holiday 
                (as defined in section 7503).
            ``(2) Timely mailing.--Any notice under subsection (c)(2) 
        or (d)(2) which is delivered by United States mail shall be 
        treated as given on the date of the United States postmark 
        stamped on the cover in which such notice is mailed.
    ``(l) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section.''
    (b) Withheld Child Support To Be Shown on W-2.--Subsection (a) of 
section 6051 of such Code, as amended by section 310(c)(3) of the 
Health Insurance Portability and Accountability Act of 1996, is amended 
by striking ``and'' at the end of paragraph (10), by striking the 
period at the end of paragraph (11) and inserting ``, and'', and by 
inserting after paragraph (11) the following new paragraph:
            ``(12) the total amount deducted and withheld as a child 
        support obligation under section 7525(c).''
    (c) Application of Estimated Tax.--
            (1) In general.--Subsection (f) of section 6654 of such 
        Code (relating to failure by individual to pay estimated income 
        tax) is amended by striking ``minus'' at the end of paragraph 
        (2) and inserting ``plus'', by redesignating paragraph (3) as 
        paragraph (4), and by inserting after paragraph (2) the 
        following new paragraph:
            ``(3) the aggregate amount of the child support obligations 
        of the taxpayer for months ending with or within the taxable 
        year (other than such an obligation for any month for which 
        section 7525 does not apply to such obligation), minus''.
            (2) Paragraph (1) of section 6654(d) of such Code is 
        amended by adding at the end the following new subparagraph:
                    ``(D) Determination of required annual payment for 
                taxpayers required to pay child support.--In the case 
                of a taxpayer who is required under section 7525 to pay 
                a child support obligation (as defined in section 7525) 
                for any month ending with or within the taxable year, 
                the required annual payment shall be the sum of--
                            ``(i) the amount determined under 
                        subparagraph (B) without regard to subsection 
                        (f)(3), plus
                            ``(ii) the aggregate amount described in 
                        subsection (f)(3).''
            (3) Credit for withheld amounts, etc.--Subsection (g) of 
        section 6654 of such Code is amended by adding at the end the 
        following new paragraph:
            ``(3) Child support obligations.--For purposes of applying 
        this section, the amounts collected under section 7525 shall be 
        deemed to be a payment of the amount described in subsection 
        (f)(3) on the date such amounts were actually withheld or paid, 
        as the case may be.''
    (d) Penalty For False Information on Withholding Certificate.--
Section 7205 of such Code (relating to fraudulent withholding exemption 
certificate or failure to supply information) is amended by adding at 
the end the following new subsection:
    ``(c) Withholding of Child Support Obligations.--If any individual 
willfully makes a false statement under section 7525(a), then such 
individual shall, in addition to any other penalty provided by law, 
upon conviction thereof, be fined not more than $1,000, or imprisoned 
not more than 1 year, or both.''
    (e) New Withholding Certificate Required.--Not later than 90 days 
after the date this Act takes effect, each employee who has a child 
support obligation to which section 7525 of the Internal Revenue Code 
of 1986 (as added by this section) applies shall furnish a new 
withholding certificate to each of such employee's employers. A 
certificate required under the preceding sentence shall be treated as 
required under such section 7525.
    (f) Repeal of Offset of Past-Due Support Against Overpayments.--
            (1) Section 6402 of such Code, as amended by section 
        110(l)(7) of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, is amended by striking subsections 
        (c) and (h) and by redesignating subsections (d), (e), (f), 
        (g), (i), and (j) as subsections (c), (d), (e), (f), (g), and 
        (h), respectively.
            (2) Subsection (a) of section 6402 of such Code, as so 
        amended, is amended by striking ``(c), (d), and (e)'' and 
        inserting ``(c) and (d)''.
            (3) Subsection (c) of section 6402 of such Code (as 
        redesignated by paragraph (1)) is amended--
                    (A) by striking ``(other than past-due support 
                subject to the provisions of subsection (c))'' in 
                paragraph (1),
                    (B) by striking ``after such overpayment is reduced 
                pursuant to subsection (c) with respect to past-due 
                support collected pursuant to an assignment under 
                section 402(a)(26) of the Social Security Act and'' in 
                paragraph (2).
            (4) Subsection (d) of section 6402 of such Code (as 
        redesignated by paragraph (1)) is amended by striking ``or 
        (d)''.
    (g) Repeal of Collection of Past-Due Support.--Section 6305 of such 
Code is hereby repealed.
    (h) Clerical Amendments.--
            (1) The table of sections for subchapter A of chapter 64 of 
        such Code is amended by striking the item relating to section 
        6305.
            (2) The table of sections for chapter 77 of such Code is 
        amended by adding at the end thereof the following new item:

                              ``Sec. 7525. Collection of child 
                                        support.''
    (h) Use of Parent Locator Service.--Section 453(a) of the Social 
Security Act (42 U.S.C. 653(a)) is amended by inserting ``or the 
Internal Revenue Service'' before ``information as''.
                                 <all>
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